Sellers on Amazon FBA are frequently concerned about their revenue share after deducting all fees and other expenses. They are concerned that it will add up and eat into their profit margins.
It is most practical to use an Amazon FBA calculator for this purpose. It is useful in determining how profitable a product is as well as selecting the best fulfillment method for your items that will provide you with good returns.
How to Check Amazon Profit and Revenue?
To determine your profitability and revenue, you must first determine how much you will spend on various fees such as registration, referral fees, FBA/FBM fees, advertising costs, and so on.
Only after you have a thorough understanding of these charges will you be able to determine how much profit you have made.
Amazon fees of Various Types
- To begin, you will be charged based on the type of seller account you have. Amazon individual sellers pay $0.99 per item sold, while professional sellers must pay $39.99 per month.
- Sellers must pay a referral fee to Amazon, which typically ranges from 8% to 15% and can reach a maximum of 45 percent depending on the category in which they are selling.
- Advertising is critical to making money on Amazon. Amazon ads use a PPC (pay per click) model, with the average cost per click being $0.81.
- Consider all of the expenses associated with selling on Amazon.
Steps to Determine Amazon Profit and Revenue
- First, check your Amazon seller dashboard for your sales figures.
- Once you’ve got a general idea, look at the payments report on the Payments page to see how much of your Amazon expenses are eating into your revenue.
- You’ll then have a good idea of how much you’ve spent on various Amazon fees.
- When you compare the amount you spent to the amount you earned, you can see what percentage of your revenue is spent on fees and the rest is profit.
- Choosing a fee percentage that you’re willing to pay can help you stay profitable.
- This fee percentage should be one with which you are comfortable, and you should strive not to spend more than that amount.
- This is done so that when you do your calculations, you will immediately realize that you will not be earning as many profits as you anticipated when the fee percentage turns out to be much higher than what you had originally decided on.
- You can then begin to reduce functions such as advertising, which may reduce your revenue and, as a result, your profits.
Profitability Calculation
Most Amazon sellers begin to see profits after the first 12 months of running their Amazon business.
To determine your profitability over a specific period, you must consider the revenue you generated, the cost of all the goods you sold, and all other charges you incurred while using the Amazon platform.
Because different sellers may spend more on different aspects of selling, this isn’t a universal method that all sellers can use to calculate their profits. However, you can use this as a starting point for your calculations.
Revenue Calculation
When it comes to calculating revenue, you must consider your sales figures.
Aside from sales figures, you must deduct refunds issued to customers as well as Amazon reimbursements for errors made during order fulfillment. This will provide you with the revenue you generated.
FBA Calculator for Amazon Seller Central
When you log in to Amazon Seller Central, you will see an FBA revenue calculator on your dashboard, which Amazon provides to its sellers for free, and you can also try other popular Amazon FBA calculators available online.
While selling on Amazon, product research can tell you how viable a product is to sell, but profit margins are important if you want to stay in business.
The most straightforward method is to deduct all of your additional or overhead costs, as well as the amount spent on purchasing the goods, from the final sale price.
Make sure to carefully review all of Amazon’s fees, especially if you’re a new seller, so you know exactly what to expect and can calculate your expected profits accordingly.
Recommended Guide: How to make money on amazon in 2022.
